It’s everyone’s New Year’s resolution to become a more profitable restaurant.
But in the restaurant business, it’s not always that easy.
Your labor costs are going up. Turnover is high. And states keep talking about the minimum wage increase.
Your restaurant’s inventory par levels and food costs go hand in hand.
It’s one of the hardest things to juggle… Having enough inventory to meet demand each week, but also keeping it low, as to avoid stockpiling or food waste.
We mentioned this in our last article, but keeping track of inventory (and your par levels) is essential to the success of your restaurant.
Lower inventory levels help:
How often do you check the prices of your ingredients?
Every delivery? Once a week? Once a month? You’re expecting your food cost to be around a very specific number. Your supplier didn’t mention any major changes in price, so why should you have to worry? You’re getting a good deal after all, right?
But prices are seasonal, and will often change. Small increments here and there. Sometimes they may go unnoticed. Sometimes you may catch them.
In an ideal world, your food cost would be exactly what you expect every single time. But unfortunately, that’s not how the supplier industry works.
So what is food cost variance and how can you keep it under control? Below we’ve outlined what food cost variance (as called cost variance) is and a few ways you can keep it under control.
You’re busy.
Well, ever since you opened your restaurant, you’re never not busy.
You’re being pulled in a million different directions at all times. You’re covering for a waiter who skipped his shift. A customer is causing a scene. A fight just broke out in the kitchen.
With all that going on, you just haven’t had the time – or energy – to focus on reducing your restaurant’s food waste.
You’re not keeping track of your orders. Instead, you’re just placing the same ones over and over. Who has time to analyze all that stuff?
Well, when you don’t analyze that “stuff”, you’re throwing out hundreds of dollars a week in wasted food.
And you have nothing in place to help with your restaurant food waste management.
But, you can reduce food waste in your restaurant in a ton of ways, including inventory management, smarter ordering decisions, and more.
Stop letting restaurant food waste kill your profits.
Read on and give them an extra breath of life.
You’re not the only one with restaurant food waste issues. Sadly, it’s an industry-wide epidemic.
According to the National Restaurant Association, over 133 billion pounds of food was wasted in 2010. And that number has continued to climb.
That breaks down to the average restaurant tossing about 4-10% of food before it even reaches customers.
Sure, your restaurant may not be average. It’s tossing away less. It’s special, just like you.
But no matter how special you are, we can bet your restaurant food waste cost is higher than you want it to be.
Even though restaurant food waste is costing the industry billions each year, only 50% of restaurants – at most – are tracking it.
Which means you’re simply allowing yourself to waste money. You might as well just light a pile of cash on fire while you’re at it.
When orders aren’t adjusted, you’re not accounting for the fact that for some reason, your normally popular Bananas Foster didn’t sell as much last week.
And now you’ve got triple the bananas in your stockroom, a ton of which are about to spoil if sales don’t pick back up.
You also aren’t taking the time to research ingredient prices. And though monitoring prices may not help you with reducing restaurant food waste, it can save you a pretty penny on your orders.
So basically, what does this boil down to?
Your ignorance is costing you thousands.
You’ve got no pars to order against. No budget to keep your spending in check. No weekly inventory count to see what you need to order in the first place.
Want restaurant food waste to stop harassing your bank account? Start paying attention.
Ready to actually make a change?
Here are a few places to start.
A solid, weekly budget is a great way to keep your staff aligned when it comes to ordering.
It forces you to stop and take a good, hard look at your finances.
Each week, you’ll want to hold a team meeting with all of your managers. At this meeting, you’ll reflect on the past week. What went well? What didn’t?
Then, you’ll look ahead at the upcoming week, and figure out if there are any specials, events, or more.
You’ll take all that information and build a budget for the week.
Make sure all orders are subtracted from it, so you can keep your spending in check.Or, if you do go over, you can pinpoint exactly why.
Setting pars on all of your ingredients (or even just on your top-20 most used ones) can make a huge dent in reducing restaurant food waste.
Essentially, your par level is how much of an ingredient you expect to have on your shelf at any given time.
You’ll set this based on how much you intend to sell each week, leaving some room for extra, just in case you sell a bit more than normal.
Then, when you’re going about your ordering, you order based on what you actually need, not just what you think you do.
A quick restaurant food waste management tip: Pars can change. They’re not set in stone. As sales go up and down over time, adapt your pars accordingly.
This one’s a no-brainer.
It’s easy to reduce food waste in your restaurant with inventory management.
But “inventory management” doesn’t mean stepping into your stockroom, doing a quick scan, and then leaving.
It also doesn’t mean using a pile of spreadsheets covered in tomato sauce.
It means actually hunkering down and getting the accurate numbers you need.
Because inaccurate numbers mean you’re going to make inaccurate spending decisions for your restaurant.
And that’s just a waste of time.
All the methods we’ve mentioned – while extremely valuable – can be very time-consuming.
Especially taking a full inventory.
But the right restaurant technology? It can make a huge difference in reducing restaurant food waste.
Plus, it can save you hours of time.
That’s what we’ve built here at Orderly. We’ve made it so you don’t have to count inventory, yet can still get accurate numbers. Well actually, you’ll get more accurate numbers.
(Sound fishy? Schedule a demo and let our product specialists show you how it works.)
Plus, Orderly has functions to help you set and maintain both a budget and par levels.
It’s designed to help you save time and money, and to help control your restaurant food waste.
You don’t always notice your restaurant food waste.
But that doesn’t mean it’s not harming your business.
You can’t just ignore a rat that runs through your kitchen daily. Eventually, he’s going to cause you some serious problems.
Restaurant food waste is the same way.
Don’t wait until it’s too late. Get started reducing your waste now.
Whether that’s on your own terms or with the help of restaurant technology, it’s a change that needs to be made.
It can save the world. It can save your bank account. And it can save your restaurant.
According to the National Restaurant Association, the restaurant industry netted almost $800 billion in sales in 2017.
So.. why are you still struggling to turn a profit?
It’s probably because you’re not taking care of your food costs.
Make a change and save your restaurant.
Here are a few places to start:
Running a restaurant was your dream.
Maybe for years. Maybe more recently. It seemed like it was meant to be.
But when your dream finally came true, it felt more like a nightmare.
Your chef is over-ordering strawberries, and they keep spoiling.
The line cook has been putting an extra ladle of sauce on every pasta dish.
Or maybe your waitress does her weekly grocery shopping in your walk-in and you know nothing about it…
So you’re thinking about opening a second restaurant.
You feel ready for expansion. Sales are good. Profits seem up. And you’re ready to show a whole new market what your food can do.
But there are some big questions you need to ask yourself before you get started.
You always hear about ways to “Get Rich Quick” in your restaurant.
You get emails hawking products that cost thousands. But they maybe save you hundreds.
So, when it comes to running a restaurant, making more money isn’t about a flip of the switch.
For most people, Summer means beaches and BBQs.
For you, it means longer days, new staff, and a whole extra slew of customers.
Hibernation season is over. People are out and about again.
If you prepare correctly, this can bring a wave of profits to your restaurant.
